RE: Vale's aggressiveness!!!!Carkis,
When you are number two you just have to try harder. That is exactly what Vale is doing!
A buyout of Cantex by Vale??? As much as Vale may want that to happen down the road – well, one should never say never but I think a certain hot spot would have to freeze over before Chuck would sell out his interest in Suwar or Cantex. Chuck’s motivator is his desire to leave a perpetuating legacy behind after he is finished chasing his last indicator mineral. Some would say it is his ego that is the motivator. Whatever, he has started the process with his Foundation. It could be funded quickly with relatively minor amounts if he were to accept a buyout for Suwar, (if the mineralization proves to be there) but the Foundation would be much better served into perpetuatity with an income from producing mines or the mineral district he believes he has found. Add to that any further diamond prospects that turn out to be economic and we know have the lengthy time horizon on turning a diamond find into a producing mine – so it looks like Chuck’s plan is to have the Foundation funded by its holding for many years after he is gone.
Back to the unlikely buy out.
Chuck and Robert Friedland may share an entrepreneurial spirit but their approach to an execution of a plan may be quite opposite. Robert Friedland sold out Diamond Fields interest in the Voisey’s Bay nickel deposit to Inco for 42% of the metal contained in the deposit (proven metal – at the time of sale). Does anyone remember the selling price - $4.3 Billion, if I remember correctly? So what is Suwar worth to Cantex?
Isn’t the deal set up to leave Cantex with a 40% interest? Yes, I know both parties must pay the Yemen government 36% taxes but that is after operational costs etc. - only on profit, plus a 1% net smelter run. But what is it costing Inco in governmental taxes, provincial and federal not to mention the required construction of new technology processing , just for the right to develop Voisey’s Bay. Suwar does not look like that bad of a deal to me. I remember years ago the rumour that Suwar could eventually be worth $10 toward a share of Cantex stock. After reading about those IP anomalies in the last news release and comparing them in size to what the first geophysical surveys produced at Voisey’s Bay, I am beginning to believe that those old rumours may have a grain to truth to them.
P10